Stephane RochonWalt Disney Co.DISBUYOct 27, 2003

Owns shares in company, and will continue to own. Expecting changes with return of Bob Iger. Believes company will be able to reduce spending, and turn around business. Strength in theme park business. 

Disappointing, to say the least. Spent a lot of $$ on streaming content, which has been troublesome, not seeing a profit. Subscriptions have wavered. Plans to reduce spending on content, but how will this impact subscribers? Now above 200-day MA. Wait and see. Long-term iconic brand, more wealthy travellers to parks. Studio fatigue.

Even veteran investors can fall in love with a stock. Big mistake. That's what happened with DIS, which he held onto as it lost over half its value since 2021. He refused to sell it, despite buying 21st Century Fox's assets in 2019 for too much, installing a new CEO in 2020 which was a bungler, and who overspent on Disney+. After a dismal quarter in Nov. 2022, CEO Chapek tried spinning it as a positive, and that's when he called for Chapek to resign. Ex-CEO Iger returned and shares bounced for a while, but Disney's problems are too deep to fix overnight. That said, he still believes Disney has a great set of franchises, the balance sheet has been fixed because the company generates a ton of cash and still feels Iger--with smart activist investors--can control costs and fix the company. They will have so much cash that Iger can buy Hulu without straining cash flow. So, he's been buying on weakness. But it was a mistake to believe in this when shares were in the $180s. DIS will come back.

It's not just about the streaming. Has many other elements that provide value.

Comparing share price to the whole, you can see between $130-150 in a sum of the parts valuation. Massively out of favour. Activists stoking the fire. Direct-to-consumer transition is not cashflow positive. Park growth will be capital intensive. Big plans that will take time to spit out cashflow.

Not a long-term compounder. A medium-term, undervalued asset. Lots of value protects you on the downside.

They reinstated the dividend today which is great. And he likes the moves of the activist investor, Peltz.

He just bought more shares. He still expects CEO Bob Iger will get it right, like cutting content (only 1 Marvel film will be released in 2024). He was a little early buying this. It's a slight contrarian call.

It's good news that they just reinstated the dividend. It re-establishes credibility among shareholders. They will remain disciplined in growing Disney+ and won't cannabilize all their cash flow to do it.

Does not own shares. Turnaround story at this point. Unsure of direction of business. Strong content inventory, but business has been unable to execute. Streaming business not panning out. Will take time for business to prove itself again. Company will have to focus on traditional theme park business. Will take time to see. 

They have owned it for a long time. For it to do well the Parks side has to do well and there has been some cost cutting. The movie part of the business should do better. There has been an issue with the streaming business but Disney+ is one of the fastest growing streaming networks. They should start re-paying their dividend and it is at a good level to buy. One question is how do they deal with ESPN

Some fatigue around content, especially Marvel. Falling Disney+ subscription numbers. Profitability is improving. Aiming for streaming profit by 2024. Unmatched brands and assets. Resorts are doing well. Seeing a lift in the stock, but he's watching his stop-loss level.

It's been on a tear since last October. It got too cheap, then reported a good quarter, announced further cost cuts, great streaming numbers which could lead to profitability next year, could enjoy better numbers in China, and today an activist bought a serious stake in DIS. The market has changed its tune on DIS.

Subscriber growth has been hard going. All companies are just throwing content out there, hoping something will stick. A challenging space, and economics will be even more challenged. Sell, and allocate elsewhere.

They reported Wednesday and was the best of the recent reports in this sector. DIS shares have been struggling all year. But revenues beat and adjusted EPS strongly beat. They're making cash again. Streaming is losing less money. They got religion on cost cuts, raising targets from $5.5 billion to $7.5 billion in cuts. Cash flow projections are strong. CEO Iger is taking control of the narrative. Once he tames costs, DIS can have tremendous earnings power. He expects DIS to reinstate the dividend (a little at first) soon and buybacks down the road. That's why he's holding onto his shares. This quarter could be a turning point. Also, there's an activist investor in the picture. This stock has room to run, targeting $100 at year's end. He's bought a lot of DIS on weakness.